Life today is better if you're already established, i.e. have a well paying job, own a home, etc.
Being young in todays world is exponentially harder than it was, say, 40 years ago. Many young people have given up on the idea of home ownership. I'm 26 and I've had friends laugh in my face when I suggested owning instead of renting. It's simply unattainable unless you're in a lucrative field. I'm in Canada for reference (our home price to income ratio is one of the worst in the world).
Home ownership at a young age is an overrated fetish. A home is just a box to keep you and your family warm and dry. Getting attached to a box is silly.
For my first 15 years out of school, renting was the best. Every year I would run the numbers based on the market prices and downpayment I could afford, and conclude that it was more advantageous for me to continue renting, in terms of total cost of ownership.
Renting in my younger years allowed me to move around, following economic and family tailwinds wherever they took me without being burdened by a piece of property that has insane transaction costs (multiple percentage points).
Now that I'm older and less likely to move around in my life, I'm able to afford to be a homeowner. It's good, but unexpectedly having to shell out thousands of dollars every time the house has a problem (plumbing, AC, windows, etc) takes getting used to.
I feel that this was the right call when I compare with a few relatives who are about my age and bought property earlier. They had to change jobs afterwards due to economic changes, and moved to a different city or country, but they didn't manage to sell their property at the price they wanted. So they're now reluctant landlords, dealing at a distance with problematic tenants, and renting a new place of their own in a new city. That feels like a headache I'm happy not to have.
Yes, exactly. Owning a home made a lot more sense when employment was for life and young adults had kids. But I don't have children and who knows where my next job will be? I'd take a good offer almost anywhere. Owning complicates that.
Gen Z's parents are my age or younger and IME there were few people who graduated with a high school diploma and bought a house. I bought my first house at 39 though obviously the housing bubble had a lot to do with that. I never felt particularly worried about my lack of home ownership. Pre-kids it allows for a lot of flexibility, one can easily move around as desires and job opportunities change. I'm not sure why anyone would want a house in their 20s honestly.
It seems like younger generations view of their parents times are getting rosier and rosier.
The young are not going to become homeowners or start families if they can’t afford it. It’s not a wait your turn, stages of life kind of thing. There is no path for someone who is in their 20s now to ever own a $2m home. Indeed, household formation and fertility are low and declining compared to previous generations at the same point in their lives.
I think this is only really true if Millennials continue to attempt to live like their parents.
First thing people need to do is stop fetishizing home ownership. It's not a magical object, instead of buying a home put your money in an index fund, you'll be better off financially anyway in 20 years. Owning a home is just a status symbol people are obsessed with for your quality of life it doesn't matter if you own or rent. Even better would be to share a space with peers. Not only does it make housing cheaper, it makes everything cheaper. Nobody in their 20s or 30s needs to be isolated in some giant house.
Education is predominantly getting much more expensive at elite institutions, but good public universities in-state are still affordable, or go and move abroad and get a degree in Europe if you're American. If you don't like to go to university, pick up a vocation, a lot of them pay well. In general be ready to move to improve your circumstances. Physical mobility in the US has fallen to extreme lows, it's one of the easiest way to improve your situation.
Being a millenial myself I'm actually not pessimistic about the generation at all, or at least not fatalistic. This isn't an economy any more where you get a job at 23 and then you're set for life and then live in a suburb with your labradoodle. To me that's a positive.
I think part of an overlooked view is many millennial aren't interested in owning a property and more than happy to rent for life.
I know that in some countries renting is the default mindset and it seems like within the UK priorities are shifting among that age bracket. I'd assume that's partly due to them not seeing property ownership as a realistic goal thanks to the price of them.
As a Guardian opinion piece [0] points out:
"Abandoning the hope of home ownership represents freedom for many millennials: it frees up cash that would otherwise go towards buying an asset into living in the present. That can mean renting a more comfortable room (or flat) in a nicer area, it can mean the difference between having enough money to go out or not, and it can even mean hiring a cleaner to make the overpriced rented flat a good deal nicer.
Home ownership is almost universally seen as a life goal, or a milestone of success. It needn’t be – not owning a home can be a real benefit for many younger adults. It gives us the freedom to move with work, and try to build savings for other purposes – insurance against getting laid off, for travel, or even for a 'fuck-off fund'."
(I live in London) You didn't save til 40, now own multiple properties? Yeah our generation can't do that. While having a high paying job is great, it usually comes hand-in-hand with HCOL and obscene local property prices, meaning you have to either a) move to and live somewhere else (work remotely?), b) have to settle for living somewhere basic for a few years, c) rent forever.
That decision really sucks. Previous generations didn't face this. Yes of course, we have to set our expectations accordingly. But some acknowledgement from people like yourself who got started in easier times, and didn't actually go through this, would be appreciated.
That's new, though. It used to be that kids got out of high school and moved into their own houses right away. Only about half of the people from my high school class went to college. The other half went out and got jobs as oil field welders or whatever and had bought houses by the age of 20.
I think it's a real problem for our future that there are now lots of adults who have never lived to see a functioning housing market with plentiful supply. Everyone under 30 thinks its normal that you have to save your salary for 25 years to afford a down payment on a home. It isn't.
Yes, which is always why I always cringe when I see how many people in their 20s and 30s believe that home ownership is a bad idea. The willingness to rent for life in order to live a high density, urban lifestyle is going to come back to haunt them when they get older. It's good for me as a landlord but I hope people my age start rethinking their position on home ownership.
I'd certainly like to believe I'm above the 50th percentile of incomes for my age, and I'm struggling to bring the costs of living to under 75-80% of my take home income. Given many young people aren't as fortunate as even I am I feel like there's a very large portion of the coming generation for whom owning a home will never be a reality.
I try to tell this to kids having FOMO right now with the housing market going crazy(same feeling people had in '06, even if the causes were different).
I bought a house young(26) and spent a good part of the next 16 years working on it. Sure, I enjoyed some of it, but much of it I did not. I did make money with the appreciation, but I also spent a lot on repairs and improvements. If I had focused on my career and my hobbies, I'd be richer and happier now. That all said, I didn't have kids. Maybe if I did I'd think it was worth it. Society puts a high value on having a home though, and much of that is bullshit. The world wants you to think owning a home will complete your life and signify your success but it is much more complicated than that.
Homes tie you down. They're fairly illiquid assets. Transactional costs are huge. Neighborhood issues can significantly affect your quality of life and net worth while remaining nearly completely outside your control.
And much lower incomes. We can go back and forth like this all day.
The point you seem to be missing is that it has never been the norm in the US for a 25 year old to own their own home. The closest we ever got to that would be the Silent Generation returning home from WWII and the veterans benefits we were handing out.
My parents (Boomers) rented a dumpy townhouse in their 20s and early 30s while raising two kids. They finally bought their first home at ages 33 and 29 with a 19% interest rate. Money was really tight for the next 5 years or so until my dad's career progressed. This was with a college degree and a management position. Life has always been a challenge for the youngest generation just starting out. Today's 25 year olds look at their parents and forget that their parents have had decades of wealth accumulation and career progression. They didn't start out taking trips to Hawaii every year.
Times have changed. When my parents were in their twenties, they were buying their first house, having kids, and starting up the (relatively certain) career ladder. If you're in your twenties today, there's no way you're thinking about either of these because you're saddled with six figures of student loan debt, and do not have the employment certainty it takes to take root in an area to buy a home.
I don't think he is suggesting that. The fact is that many people under 40 are priced out of the market. 20 years ago, a graduate could easily buy a flat or house, rates of owner occupation were higher, and we still had the option to rent. This tended to suit people at the start of their careers, when they were more likely to move for work. After a certain age, you start wanting to settle somewhere.
Being young in todays world is exponentially harder than it was, say, 40 years ago. Many young people have given up on the idea of home ownership. I'm 26 and I've had friends laugh in my face when I suggested owning instead of renting. It's simply unattainable unless you're in a lucrative field. I'm in Canada for reference (our home price to income ratio is one of the worst in the world).
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